Brussels – No dice: Corrections made by Budapest to safeguard the independence of public bodies (especially universities and related entities) do not convince the European Commission. Therefore, it continues to keep frozen over €6 billion in EU funds destined for Hungary, believing that the national legislation violates EU rules on the protection of the rule of law.
With a note published today (Dec. 16), the EU executive stated that it is going its own way and doesn’t deem adequate the guarantees provided by the Magyar government, led by ultranationalist and pro-Russian Prime Minister Viktor Orbán, regarding the contested regulations on “public interest trusts”.
The case started two years ago when the Council adopted a measure to avoid violations of the rule of law established in Hungary damaging the financial interests of the Union. A formula that, in essence, implies the suspension of transfers from Brussels to Budapest—which, incidentally, is currently the only capital city against which a procedure ex Article 7 of the Treaty (TEU) is open for violations of the rule of law.
As a result, 55 per cent of the budget commitments for three different programs under the heading of cohesion policy (for the 2021–2027 budget) were suspended for a total of about €6.3 billion, as well as the Commission was prohibited from entering into new financial commitments with the aforementioned trusts and the entities they manage.
The areas affected by that decision were mainly public procurement, criminal prosecution, conflict of interest law, combating corruption and, precisely, public interest trusts. Specifically, with regard to the latter, the issue is that of the presence on the boards of universities, research institutes and foundations of personnel close to Fidesz, the governing party that is effectively a machine for maintaining Orbán’s power, with obvious problems of transparency and conflicts of interest between politics and academia.
On 2 December, Budapest tried to patch up the situation by notifying the Commission of the adoption of an amendment to the law regulating conflicts of interest, which was supposed to reduce the risks flagged by Brussels. But the Commission responded in spades because, it says, the Magyar executive’s assurances are not enough, and the risk remains that trusts and related entities remain subject to undue political control.
So, the Berlaymont today confirmed its earlier decision: in order to protect the EU budget from embezzlement, the so-called conditionality mechanism remains in place and will prevent Hungary from accessing the EU funds in question. After all, the statement says, the EU executive “clearly indicated the adjustments needed to adequately remedy” the critical issues identified two years ago.
Further funds remain locked up as part of payments from the National Recovery and Resilience Plan (NRRP) for post-pandemic recovery, which likewise will remain in mothballs until Budapest takes steps to restore the rule of law that has been battered by Orbán for nearly a decade, to the point of making the Central European country “a real systemic problem” in this area (as said by former EU Justice Commissioner Didier Reynders).
English version by the Translation Service of Withub
